GE and Dow mega-deal plans fire up the action

Thursday 10 July 2008 15:42 BST

General Electric are defying the credit crunch with this latest deal

The mega-Wall Street takeover deal returned with a vengeance today. Just as investment bankers had all but given up on lucrative merger action on either side of the Atlantic, both General Electric and Dow Chemical declared plans for multibillion-dollar deals, defying the credit crunch.

Dow launched a $15.3 billion (£7.7 billion) offer for US paints business Rohm and Haas while General Electric said it would sell one of its biggest divisions in a multibillion-dollar demerger. Dow's plan was the most high-profile takeover on Wall Street since Mars took out Wrigley for $23 billion in April.

As in that deal, Warren Buffett, the world's richest man, has stepped in with his Berkshire Hathaway investment group to help with financing. Berkshire will provide $3 billion. Sovereign wealth fund Kuwait Investment Authority stepped in with $1 billion. The pair will receive equity in return.